Beyond the Limitations of Traditional Retail Strategies

Traditional retail strategies have served their purpose for decades, the evolving landscape of the market demands a shift towards data-driven approaches. They often rely on intuition and experience to guide product placements. However, these methods lack the quantitative data and insights needed to optimize profitability and customer satisfaction.

Objective

Uncover hidden patterns and relationships between products that are frequently bought together

Association Rules: A Simple Explanation

Imagine you are at the grocery store and you pick up a bag of apples. What else are you likely to buy? Maybe some bananas, or perhaps crackers to make a tasty snack. These kinds of relationships between products are what association rules are all about.

Think of association rules like "If/Then" statements. They identify products that are frequently bought together, like: If you buy fruits, then you are 80% likely to also buy granola bars.

Analysis

With over 200,000 transactions and 150 products, I meticulously cleaned and analyzed retail data using the R programming language. This involved importing the data, removing any missing or inaccurate information, and ensuring the quality of transaction data. Then, I employed the powerful Apriori algorithm to uncover hidden relationships between products, revealing valuable insights into what customers bought together. This information is helpful to plan for optimal store layout (Product placement), Promotion and Inventory Management.

Conclusion

A fascinating trend has emerged: snacks and produce are frequently bought together! Let's break it down.

Support: 30% of all transactions included both snacks and produce, indicating that this pairing is not just a coincidence. It's a frequent occurrence!

Confidence: 80% of the time customers bought snacks, they also purchased produce, showcasing a strong association between these seemingly disparate categories.

This data paints a clear picture: shoppers love pairing snacks with their produce!

Use-case

By understanding this hidden connection between snacks and produce, retailers can create a more enjoyable and beneficial shopping experience for everyone. Also, we can offer promotion/discounts on yogurt with berries and granola as a quick and delicious breakfast solution.